Tuesday, March 27, 2007

Why Are Text Messages Marked Up 7314%?

Ben Popkin writes on Comsumerist:

Verizon and other cellphone companies mark up the cost of text messages by at least 7314% when compared to their rates for data transfer services.

Verizon's max text message size is 160 characters. At 7 bits per character, that's 1120 bits or 140 bytes. Without a text messaging plan, those 140 bytes run you $.15 (fifteen cents), according to Verizon's website.

Compare that to the rate for data transfer (like when you would use your cellphone as modem). That rate is $.015 (one point five cents) every 1024 bytes.

That's $.015 per data kilobyte versus $1.09 per text message kilobyte. In other words, a markup of 7314%. Other cellphone companies charge comparable rates.

More here.


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